NEW YORK, Aug. 18 /PRNewswire/ -- On August 18, 2006, Inland Fiber
Group, LLC ("IFG") and Fiber Finance Corp. ("FFC" and, together with IFG,
the "Companies") announced today that they have reached a final settlement
resolving all of the outstanding claims in the previously disclosed
litigation between the Companies and certain other defendants, and the
trustee under the indenture governing the $225 million principal amount of
9-5/8% senior notes due 2007 issued by the Companies. In accordance with
the settlement agreement, the Companies have filed voluntary petitions for
relief under Chapter 11 of the United States Bankruptcy Code with the
United States Bankruptcy Court for the District of Delaware and a
pre-negotiated plan of reorganization, and will seek approval of that plan
by the end of the year.
    Under the settlement and plan of reorganization, the holders of the
notes will receive 68.57% of the principal amount of the notes. Holders of
notes, or their respective affiliates, that collectively own or manage
$158.3 million (or approximately 70.4%) of the outstanding principal amount
of the notes have executed a support and lock-up agreement pursuant to
which they have agreed to vote in favor of the plan.
    These noteholders and the indenture trustee have also agreed to forbear
from exercising any rights and remedies under the indenture, or from
pursuing any claim pertaining to the notes or the subject matter of the
litigation.
    As part of the settlement agreement and plan of reorganization, IFG has
reached an agreement to sell certain of its assets, including its seed
orchard, to a third party. The purchase price for these assets is $83
million. This agreement is subject to certain limited conditions for
purchase by the third party purchaser. The Companies have also entered into
an agreement with their insurance carriers to contribute a total of $8.3
million towards payment under the plan of reorganization. In order to
effectuate the settlement agreement and plan of reorganization, affiliates
of IFG have agreed to sell certain of their Oregon assets to such third
party purchaser and certain of their assets in the State of Washington to a
related party of the Companies. The proceeds of those sales will be
sufficient to fund the remaining amounts payable pursuant to the settlement
agreement and plan of reorganization.
    About IFG. IFG owns 167,000 acres of timberland and cutting rights on
68,000 acres of timberland containing total merchantable timber volume
estimated to be approximately 400 million board feet in Oregon, east of the
Cascade Range. IFG specializes in the growing of trees, the sale of logs
and standing timber, and the sale of timberlands. Logs harvested from the
timberlands are sold to unaffiliated domestic conversion facilities. These
logs are processed for sale as lumber, molding products, doors, millwork,
commodity, specialty and overlaid plywood products, laminated veneer
lumber, engineered wood I-beams, particleboard, hardboard, paper and other
wood products. These products are used in residential, commercial and
industrial construction, home remodeling and repair, and general industrial
applications as well as in a variety of paper products. IFG also owns and
operates its own seed orchard and produces approximately five million
conifer seedlings annually from its nursery, approximately half of which
are used for its own internal reforestation programs, with the balance sold
to other forest products companies.
    About FFC. FFC, a Delaware corporation, is an affiliate of IFG without
any operations or significant assets.
    Certain information discussed in this press release may constitute
forward-looking statements within the meaning of the Federal securities
laws. Although IFG believes that expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved. Forward-looking
information is subject to certain risks, trends and uncertainties that
could cause actual results to differ materially from those projected. Such
risks, trends and uncertainties include the ability of IFG to continue as a
going concern, its ability to obtain approval of the plan of reorganization
from the bankruptcy court and its creditors, the highly cyclical nature of
the forest products industry, economic conditions in export markets, the
possibility that timber supply could increase if governmental,
environmental or endangered species policies change, and limitations on
IFG's ability to harvest its timber due to adverse natural conditions or
increased governmental restrictions. For a more complete description of
factors, which could impact IFG and the statements contained herein,
reference should be made to IFG's filings with the United States Securities
and Exchange Commission.

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